Minister for Housing Simon Coveney has said the new wording of legislation to curb rent increases ensures the maximum rent rise is 4 per cent in designated areas.
Mr Coveney assured TDs that his department officials had worked into the early hours of Friday to deal with the drafting error in the controversial Planning and Development (Housing) and Residential Tenancies Bill.
The department received legal advice from the Attorney General on the issue over concerns that wording in the Bill could see rents increase by 8 per cent annually.
The new wording was “both constitutional and legally sound”, Mr Coveney told the Dáil and would mean that a tenant in a rent pressure zone would pay a maximum rent increase of 4 per cent a year at the end of a two-year tenancy.
He stressed that rent could not increase by more than 4 per cent on any property in a pressure zone, no matter when a review of rent occurs.
If the tenants changed within six months the rent could rise by a maximum of 2 per cent to prevent landlords being incentivised to end a tenancy early.
Following days of tension between Fianna Fáil and Fine Gael over the 4 per cent a year increase and Fine Gael’s bid to restrict it to Cork and Dublin, a compromise was reached between the two parties to expand the measure to other cities and commuter towns next year.
The eventual agreement was seen as a victory for Fine Gael and Mr Coveney.
But Fianna Fáil housing spokesman Barry Cowen said in the Dáil that ramming through legislation over 48 or 72 hours was not best practice.
He added that some in Fine Gael were claiming victory rather than working to ensure rents would not increase across the country instead of keeping it to two cities.
‘Perfect document’ for landlords
During debate on the 4 per cent amendment, Independent TD Catherine Connolly sharply criticised the legislation and the Minister’s strategy.
“You have reduced the housing crisis to an equation and a rent increase of 4 per cent equates to homelessness”, she said.
The Galway West TD described the Bill as a “perfect document” for landlords and friends of the Government.
Ms Connolly said she admired that Mr Coveney stuck to his convictions, that he firmly believed in the free market.
But she told him: “There is no security of tenure. There is no affordability. In fact you’re building in increases.”
And she warned: “You’re fast tracking evictions for those who won’t be able to pay their rents.”
In sharp criticism of the legislation and the Government’s housing strategy, Ms Connolly said “there is absolutely no evidence to justify rent increase of 4 per cent or 8 per cent”.
But she said there was evidence to show that the highest number of evictions was in the group of people who could not afford to pay their rent.
